Many analysts agree that the mining and metals industry has operated successfully during 2020, despite the challenging landscape brought on by the Covid-19 pandemic.
In Canada, a measure of the activity and performance of the junior mining sector is the S&P/TSX Venture Metals & Mining (Industry) Index. Another performance measure is the Canadian Mining Eye index, a quarterly report.
The S&P/TSX Venture Metals & Mining Index tracks some 266 or more TSX Venture-listed (publicly-traded) mining companies with a total market cap of $28,908 million (CAD). The average market capitalization is $109 million, but varies considerably ranging from $11 million up to $861.4 million. The Index has reported annualized returns of 15.94% over 5 years with 75.47% year-to-date (February 23, 2021) returns.
The Canadian Mining Eye is a quarterly index tracks the performance of 100 TSX- and TSX-V-listed companies with market capitalizations between $334 million and $4.4 billion. The Index increased 9% in Q4-2020, following +10% in the prior (Q3-2020) quarter.
Some mining analysts apply, among many measures or rules of thumb in analyzing junior mining companies. One vital measure is the market capitalization verses the estimated value of mineral resources. Ideally, the mining stock’s market cap is no more than half the value of the minerals in the ground.